Mixed Signals Keep Gold Trading Volatile as Economic Data Fuels Policy Debate

2025-12-26 02:50:07

Gold struggled to find direction in Tuesday’s trading session, ultimately ending the day in negative territory. December futures settled at $4,304.50 per ounce, down $2.20 or roughly 0.1 percent, following Monday’s modest gain of $6.60 (0.2 percent) that saw prices reach $4,306.70.

The choppy price action reflected an abrupt shift in market sentiment triggered by conflicting economic indicators from the Labor Department and Commerce Department. Employment figures painted a paradoxical picture: while non-farm payrolls expanded by 64,000 positions in November—exceeding the economist consensus of 50,000—this recovery followed a substantial October decline of 105,000 jobs. The sharp reversal highlighted underlying labor market fragility despite the headline beat.

More concerning for growth prospects, the unemployment rate jumped to 4.6 percent from 4.4 percent two months prior, exceeding forecasts for a 4.5 percent level. This marked the highest jobless rate since September 2021 when it hit 4.7 percent. For gold traders, such deteriorating employment conditions typically support safe-haven demand, yet the improvement in headline job creation tempered bullish momentum.

Consumer spending data further complicated the narrative. October retail sales remained essentially flat, contradicting economist expectations for 0.2 percent growth and matching September’s downwardly revised 0.1 percent increase. When stripping out volatile auto sector sales, the picture improved modestly, with underlying retail activity climbing 0.4 percent versus the anticipated 0.3 percent gain.

The divergence between resilient payroll growth and rising unemployment has intensified expectations that the Federal Reserve will maintain its current rate-cutting trajectory in coming months. However, the weak consumer spending backdrop simultaneously raised questions about economic durability. This mixed message kept precious metals trading in neutral territory, with participants balancing inflationary concerns against recessionary risks. Until clearer economic signals emerge, gold trading may continue fluctuating around current levels as market participants reassess policy implications and growth assumptions.

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